I used to edit Innovation Management. My book, "The Elastic Enterprise", co-authored with Nick Vitalari and described as a must read for companies that want to succeed in the new era of business - looks at how stellar companies have gone beyond innovation to a new form of wealth creation. I speak on new innovation paradigms.
I started my writing career in broadcasting and then got involved in the EU's attempt to create an ARPA-type unit, where I managed downstream satellite application pilots, at just the time commercial satellite services entered the market. I also wrote policy, pre the Web, on broadband applications, 3G (before it was invented), and Wired Cities.
I have written for many major outlets like the Wall St Journal, Times, HBR, and GigaOm, as well as producing TV for the BBC, Channel 4 and RTE. I am a research fellow at the Center For Digital Transformation at UC Irvine, where I am also an advisory board member, advisory board member at Crowdsourcing.org and Fellow of the Society for New Communications Research.
Google.com/haydn

Apple Sells Well Again, Here's Why It's Being Punished

There’s surely one over-riding reason for disappointment in Apple this morning and that’s the company’s lack of progress in wearables and the home. Once again, Apple has enjoyed record sales of its flagship phone but like Samsung it is under pressure. The difference lies in how the two are reacting

Profit growth at Samsung’s mobile division, its main earnings driver, has stalled as the top end of the smartphone market becomes increasingly saturated. Sales of mobile devices declined 9 per cent from the third quarter, contributing to a drop in overall operating profit of 18 per cent to Won8.3tn ($1.2bn), matching guidance Samsung gave earlier this month.

Yesterday, Samsung let it be known that it will reveal a new Glasses product before the Fall. Earlier this month the company also announced its entry into the smart home market. This looks like Samsung’s first big, home-grown ecosystem play as it will look to partners to integrate products into its home automation system.

The South Korean government, meanwhile, has announced it is backing the accelerated adoption of 5G – the successor to LTE, the fast mobile network. The South Koreans will have trial 5G networks in place by 2017. Samsung is a key 5G infrastructure player and should see its Tizen html5 OS come to life in a faster mobile web word. But it is also claiming to have some very novel, super-fast infrastructure technology for 5G, a claim met by skepticism at first. The skepticism is beginning to quieten down.

On top of this we are waiting on an early release of the Samsung S5 and a new generation Galaxy Gear. The company is also making heavier investments in its software and services, trying to close the gap in experience with Apple.

In short, Samsung is in infrastructure, devices, home automation and wearables and is moving into ecosystem services. If you look around the US tech scene, there is only one company you might say that of right now. That is Google, with its fiber and Loon infrastructure projects, Nexus range, the Android ecosystem and the connection with Nest in the home, and Google Glass.

Samsung recently reached an inclusive patent agreement with Google – they will not war over IP for the next ten years. In fact, they look likely to share a lot of intellectual property. Samsung also cleared the decks with infrastructure rival Ericsson.

What’s clear from these actions is that Samsung management is ready to move on. Under pressure in smartphones, it is plotting and executing on radical new moves.

In contrast, Apple is not. Tim Cook still talks about the disruptive new products in the pipeline. And he’s right that Apple has a distinct model that other companies envy. It’s hard to avoid the conclusion though that the market is punishing Cook. Look around and it is clear to see why.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

Sorry dude, but you are completely off base here. In typical Asian company fashion, Samsung is trying to do everything and will end up doing few things well. They should stick to what they know well, which is to clone Apple products and make a cheaper copy for lower cost, not try to innovate everything else.

tim cook is the problem with apple. he harbors an elitist mentality that does not understand that apple is blowing the biggest opportunity EVER. apple could have established a massive market share of phones and been invading the pc world at a much faster pace if they were only willing to sell products at a smaller premium to the competition. instead, tim cook refuses to demand that his operations team build cost-competitive devices that are still awesome and new. apple is neither willing to battle on price and technology innovation, nor introduce enough truly new and innovative product design iterations – and as a result, it loses market share. tim cook is the problem. a great ceo could unleash the power of apple within a single year. tim cook must go for apple to be great.

On the surface and considering its great amount of cash wealth, Apple appears to be the laziest tech company around. However, just because Apple is highly secretive, it doesn’t mean there isn’t something going on in the background. I’m not too concerned at this point. It looks to me as though Apple is doing rather well in a weak economy. Not fantastic, but well. The company appears solid and healthy. No layoffs, no closing of stores, consumers still buying Apple products. There doesn’t appear to be much growth but Apple is holding its own in every way except share price. That’s merely market perception and I understand it. As a shareholder, I’m just going to be patient and hope for Apple to get its act together. I’m not waiting for a miracle, just some greater expansion in other markets and I’d like to have my dividends increased. Apple is no Google or Amazon when it comes to providing shareholder value but Apple is fundamentally healthy and that should mean a lot.

If Apple ever decides to use its reserve cash to grow its business into new markets the opportunity is still there so I can’t see Apple collapsing any time soon. I can’t complain since I bought Apple back in 2004 and I am certainly getting my money’s worth. I’m somewhat disappointed Apple isn’t looking after shareholders as well as Google and Amazon are but that’s how things go. Apple was just very unfortunate to have one of the finest CEOs in Steve Jobs die on them. That’s the breaks in life. Apple shareholders could still get lucky in the future but there’s never any guarantees of how well a company can perform indefinitely.